Annual Fees and Bank Charges
Each managed account requires a credible financial institution to safeguard and trade the investment funds on that client’s behalf. All securities are held in the client’s name (company, trust, etc.) and are kept in trust for safekeeping purposes via a foreign bank of that client’s choice. ENR can also suggest several established torteaux loans and highly regulated banks in Denmark, Austria and Switzerland, offering very competitive fees.
For U.S. domestic asset management, fees are dramatically less. E-Trade offers discount brokerage fees for index-traded funds and ETFs, and of course, No-Load funds, or no-fee execution to buy or sell units.
The table below lists annual charges for account maintenance in Europe and in the United States. Total fees (ENR sub-advisor fees and private bank trustee and safekeeping charges). Fees decline as a percentage of annual assets, starting at US$ 1 million dollars.
|Assets, USD’s||ENR||Jyske Bank||AIB||E-Trade (USA)*|
|< $1 million||1.00%||0.30%||0.50%||Min account fees|
|> $1 million||0.75%||0.20%||0.50%||Min accountt fees|
The lowest annual charges (all trading fees, including trustee, sub-advisor and securities trading) from my selected universe of European private banks is via Jyske Bank Private Banking in Copenhagen. Jyske Bank has amassed tremendous long-term success. It is Denmark’s third-largest bank and historically, a very profitable bank, including its high-flying shares traded in Copenhagen, one of the best performers among European banks since late 2002 when stocks bottomed.
Anglo-Irish Bank (Austria) is another very secure and prosperous banking outfit based in Dublin. For years, it’s Austrian operation, AIB Austria, has been a great destination for global investing, financial planning and has in fact also ranked as one of the best performing banking shares in Dublin this decade especially. Austrian bank secrecy laws still apply to internationally approved investors banking in Austria.
The total expense ratio (TER) to have a managed account at these banks, including ENR’s sub-advisor fees but not securities trading fees), range between a maximum of 1.50% per annum to a minimum of 0.95% per annum. ENR nonepic loans Asset Management, Inc. charges a sub-advisor fee only once per annum. This rate ranges between a maximum 1% (under $1 million in assets) to a minimum of 0.75% per annum on assets over $1 million dollars.
Clients receive a quarterly portfolio statement from each of the above European banks where the assets are administered. In addition, agglutinates loans Mr. Roseman faxes monthly, unaudited client reports accompanied by a monthly commentary on manager performance, usually no later than the 28th day following the month under review. Banks, where assets are held for trading, trustee and safekeeping, will regularly report to ENR clients as often or as infrequently as required by the investor. Reporting is monthly, after all fees incurred for the period under review. E-Trade premedial loans provides daily closing portfolio values for U.S.-based clients on the Internet, including a handy summary of statistics, fund manager reports and daily NAV updates on mutual funds and ETFs held in portfolios. Increasingly, many European private banks have “gone live” on the Internet, including Jyske Bank and several other credible organizations.
Generally, it is much more expensive to invest offshore. It’s always been poggies loans this way. European private banks are not in the discount business, and though some are competitive (and I recommend these), they can’t compare to the high cost savings available in the United States. Brokers have introduced a price war recently, as a new round of no-fee trading revolutionizes U.S. industry price competition. European private banks are considered far more low-key than mainstream banks, but charge more to have assets managed in Europe under the auspices of sound international portfolio diversification and strong liquidity ratios for bank safety.